Adidas agrees record new deal with German soccer team

PARIS/FRANKFURT (Reuters) - Adidas has agreed to extend its sponsorship deal with world soccer champions Germany until 2022, paying 50 million euros ($56.7 million) per year to overtake France as the most lucrative national team sportswear contract.

An Adidas soccer match jersey for the German national team is displayed during a news conference by German Football Association (DFB) and sportswear company Adidas in Paris, France, June 20, 2016. REUTERS/Stephane Mahe

A battle between Adidas and Nike for dominance of the global soccer gear market has driven a steep rise in payments to elite clubs and top national sides.

Chief Executive Herbert Hainer confirmed that Adidas will pay 50 million euros a year, double the value of its previous contract and surpassing the 43 million euros Nike pays a year to France, currently hosting the European championship.

“We’ll prolong a more than 60-year partnership. We are together with the current world champions and one of the best teams in the world,” Hainer told Reuters after a news conference in Paris.

The German sportswear company has long been the world’s top soccer brand, but it was overtaken by U.S. rival Nike in the market for boots in 2014, prompting Adidas to lift its marketing spending.

Nike had also bid for the German contract, but Adidas managed to persuade the country’s football federation to extend the long partnership by offering to pay more and by promising to shift production of team shirts back to Germany.

Adidas said last week it expects to sell 1.3 million Germany jerseys this year, helped by the European championship. That is more than the 1 million it sold in 2012 when the last Euro tournament took place, but down from the 3 million shirts it shifted in 2014, when Germany won the World Cup.

Adidas is kitting out nine of the 24 teams playing Euro 2016, including reigning champions Spain as well as Germany. Nike has six teams, including host France and England, while smaller German brand Puma has five, including Italy and Switzerland.

Hainer added he was not worried that an Adidas ball that had burst during the match between France and Switzerland on Sunday would hurt sales of replicas, noting it was the first ball to be punctured after nearly 30 games played.

“We got tremendous good feedback from all the players,” he said. I’m quite relaxed.” Adidas has said it expects to sell 7 million of the Euro 2016 replica balls.